Think Universal, Act Local

Do search engine business models have to fundamentally change, given new content formats taking over SERPs? This was an important bone of contention last month when SES New York hosted a panel of heavy hitters on the mushrooming topic of universal search.

This included a memorable grilling that "The Search" author John Battelle administered to Google's universal search product manager turned punching bag, John Menzel. Local search was hardly mentioned, aside from a passing comment from Battelle (amid jabs at Menzel).

Instead, the discussion focused, as it often does, on video and images. After all, these formats -- for the same reason they attract the eye in blended search results -- are sexier than maps and stock quotes (especially if you're talking about searches for Shakira, as moderator Mike Grehan pointed out).

But local could be the dark horse that silences questions of video's impact in blended search results. More specifically, in searches where Google determines local intent, all above-the-fold SERP inventory is claimed by the local "10 pack" launched in late January.

The impact of the 10 pack on other sources of content competing for blended SERPs (e.g., images, video) will come down a simple question: How many searches are local? comScore, going by explicit local intent (i.e., zip code), has said this number is about 13 percent of searches. The Kelsey Group has estimated that broader local intent happens in about 20 percent of searches.

Let's say for the sake of argument that Google gets that same share, meaning 20 percent of its 5.8 billion monthly searches (1.16 billion searches) have the potential to get the 10 pack. This means that for more than a billion monthly searches, whether or not images of Shakira resonate is a moot point.

This number could grow as users learn to include geographic modifiers in local queries, and Google improves its ability to determine local intent. More importantly, this number could be much larger if you consider local searches that don't include a geographic modifier (e.g., "locksmith").

"Most search is local," posited Marchex's VP of Business Development Chad Schott, during a local search session at SES. "If you begin to think of local more broadly in the amount of searches that have some influence on what you do offline, the number approaches 100."

ROBO Search

Local intent probably isn't in the 100 percent range, but Schott's general point starts to make sense if you think about categories like trade services, restaurants, and certain products where most -- if not all -- conversions happen offline. For example, a search for the term "flat screen television" will, in most cases, convert offline at some point down the road (no pun intended).

eMarketer reports that search influenced almost $500 billion in retail activity last year. Krillion and the e-tailing group released a consumer survey (n=1000) last month that supports this offline purchasing reality, and also points to search as one of the top three influencers of this sizeable base of retail activity.

But the challenge inherent in this research online/buy offline (ROBO) concept is trackability. If most conversions are happening offline, how do you measure ROI on a search marketing campaign when there is an inherent disconnect between the PC and your drive to Best Buy?

One possible answer: the mobile device, because it's with you when you enter the store (think mobile coupons, send to phone, etc.). Reserve online/pickup in-store functionality is another tracking possibility that's gaining awareness among searchers. This was given credence in the aforementioned Krillion study that showed 50 percent of respondents were motivated to pickup in stores to avoid shipping costs.

Meanwhile, 50 percent of Circuit City's online purchasers (accounting for $500 million in sales last year) reserved and picked up their stuff in stores, while Wal-Mart saw about 30 percent of its online purchases picked up.

Local Grows Up

As more retailers see this opportunity and offer their inventory data to companies like Krillion, its availability will get more awareness from consumers. As this happens, the expectation of their local search experiences will evolve, and with it, their search behavior.

This data could also have SEO value as Google begins to see the opportunity to go beyond the click and have a part in tracking this $500 billion in offline action (it's already begun to experiment with this on a limited basis). Therefore, algorithms that favor real-time inventory and in-store pickup features could follow.

Then maybe local will join Shakira atop the pile of universal search panel fodder. The revenue opportunity to lead a half billion dollars in purchases is, after all (depending on who you ask), pretty damn sexy.

Additional note: These topics will be discussed in depth at The Kelsey Group's Drilling Down on Local conference, April 30-May 2 in Seattle, Washington.

About the author

Michael Boland is analyst and program director of BIA/Kelsey's Mobile Local Media program. Mike is a frequent speaker and organizer at top industry conferences, including Search Engine Strategies and BIA/Kelsey events. Prior to joining BIA/Kelsey, Boland spent several years as a technology journalist.